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QUEST MEANS BUSINESS
Greece to Be Bailed Out?; Interview With George Soros
Aired April 9, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: The day of reckoning looms. Experts say Greece could be bailed out and it might happen as soon as this weekend.
Alan Greenspan said, not my fault. Citigroup said we couldn't help it. Now Fannie Mae faces Congress.
On all these subjects, and more, tonight, George Soros talks to this program. The lessons we have learned by a top investor.
I'm Richard Quest, and I mean business.
One of Europe's biggest banks says Greece will probably need to be bailed out sooner rather than later. Economist at UBS have put out a report that says Athens could run out of money in the next two weeks. Athens may ask for international investors' aide as soon as this weekend.
The UBS report obviously confirms much of what we know. But when put in the context of market movements, in recent days it takes on a new and significant importance. For instance, a distinct possibility is how UBS describes an immediate need for bailout. Where the IMF, along with the EU, but the IMF, particularly, would have a key role. The object is to help Greece pay the immediate bills coming due later this month, the billions of dollars of bonds that have to be refinanced.
Now, into this maelstrom of worry add in this, the Fitch ratings agency has downgraded Greece to Triple B, minus. The significance of that, it is just one notch above junk status. This, of course, will greatly-it will make it more difficult for Greece to re-finance those bonds I was just talking about. And even if there is a premium now of say 4 to 5 percent, 4.5 percent over German bunds, which is the premium that Greece will be paying, there is still virtually no liquidity in that market, nor perhaps people willing to lend those sorts of-that sort of money.
So, look at that, for one second. You may well be saying, hang on a second, Richard. If it is all as bad as you've said, why would the main market in Athens, the index, rise 3 percent? Surely, that doesn't make sense. Well, of course, it makes perfect sense. If you bear in mind that UBS said, if a bailout is now looking more likely than not, and sooner rather than later, then you understand why the Athens markets, along with the other main European bourses, also rose.
The Greek finance minister continues to maintain that no bailout is needed just yet.
(BEGIN VIDEO CLIP)
GEORGE PAPACONSTANTINOU, FINANCE MINISTER, GREECE (through translator): No, no such issue has been raised. The mechanism is very important. This mechanism is a milestone for Europe and for Greece. It is a very important safety net. As you know, in the last few days there has been a schedule and detailing of this mechanism. In other words, the exact terms of how it would work, following on from the discussion of the summit. We have said that Greece not intend to make use of the mechanism, but it is very important to our country for this safety net to exist.
(END VIDEO CLIP)
QUEST: The fact of the safety net exists, as the minister said, has not been sufficient to keep the premium between Greek bonds and German bunds from rising high. We have talked about that over the course of this week. So, I needed to talk to the authors of this UBS report. One of the authors is Stephane Deo, he joins me on the line. And I wanted to know, is Greece going to need help immediately?
(BEGIN VIDEO CLIP)
STEPHANE DEO, ECONOMIST, UBS: I think there is a fair likelihood that something would happen over the weekend. If something does not happen over the weekend, there is the big bond maturing on the 12th this month. And I think it is going to be extremely challenging for Greece to find the cash to repay this bond. So, my sense is that something will happen probably in the next few days but I think definitely something over the next one or two weeks.
QUEST: The actual extra cost to Greece of the increased premium over German bunds for instance, doesn't kick in, of course, until it needs to refinance the bonds, does it? Because it is paying the lower rate on the existing bonds. It is only when it has to go back to the market that it is going to feel the pain.
DEO: Yes, that is correct, but I think the interest rate you see on the screen now, is to some extent meaningless, because this interest rate was extremely low volume on the market. So, if Greece needs to come to the market, and issue paper, the interest rate could go even higher. So, what you see on your screen is telling you two things. The first thing is, as you say, the cost will increase if they issue that. But it also telling you that the appetite from the market has totally evaporated in the past two or three days.
QUEST: OK, but we have been through varieties of stages, of this crisis. We have had an eco-fin (ph) meeting in which it said they would support, you know, where Euro Zone stability was at risk. We have had a council of ministers which came up with a financial agreement and included the IMF. But how much longer can this drama carry on?
DEO: Well, I think we had, indeed, a lot of declaration, a lot of people talking. Again, today we had the European Commission talking, etc cetera. I think now if you really want to convince the market you need something happening. So, you need real cash to be put into Greece. I think they need a bridge loan or something of this form. And until this does not really happen I think it will be extremely difficult to convince the market.
QUEST: That bridge loan probably, three letters, IMF.
DEO: I think, indeed, the IMF will be part of the program. We saw a lot of comments on that. And I think it would be the best solution, to be honest with you. Because the IMF would not only provide liquidity, but it would also provide expertise and monitoring on the Greek government, so that would help the liquidity issue over the short term, but that would also help in terms of credibility on the medium term. So having the IMF stepping, from my point of view is probably the best outcome possible.
QUEST: That is one view on the Greek crisis. Now, a man who knows a thing or two about financial crisis is the hedge fund manager, former manager, and investor George Soros, multi-billionaire. He has made, and lost, fortunes through this crisis. Made-reported to have made $2 billion over the latest crisis. I asked him what lessons we could learn from Greece and what should happen next?
GEORGE SOROS,CHAIRMAN, SOROS FUND MANAGEMENT: The crisis, while we survived 2008 and we have really managed to avoid a train wreck, it is not over. The imbalances which caused the crisis have not been removed. On the contrary in order to deal with that crisis, actually we increased the same imbalances that caused it. Just as when you have a car skidding, right? You first turn the wheel, in the same direction as the skid, before you right it. And I think the authorities very correctly did that.
QUEST: Dealing with those imbalances is a longer-term problem in many ways.
SOROS: You have short-term problems and long-term problems. In short term, you have to deal with the crisis. Now, the trouble is that the crisis itself was not just a market failure, it was a failure of the regulators. And you now have the next crisis which is the Greek problem is symptomatic of that. And again, the authorities don't understand properly the role of markets, market prices, so the Germans are insisting that when they bail out Greece, it should be at market rates. Now, that is nonsense. This is ignoring gains (ph), it is ignoring the insight we should have gotten from the crisis, namely, that market prices don't reflect some reality. So, to insist that the bailout, or the support should come at market prices, is a contradiction in terms, because that is no help.
QUEST: But at the end of the day, surely, what we are learning from the situation in Greece and potentially elsewhere, is that that system of euro, the euro as set up and constituted, was flawed.
SOROS: We knew that when it was created.
QUEST: But we didn't quite expect it to blow up quite as quickly.
SOROS: Well, it actually lasted quite a long time, considering that it was very obvious and it was part of the way the European Union was created, was to take one step at a time knowing full well that step will not be sufficient, that a further step will be required. That process was actually very much helped by Germany, which was eager to, for reunification purposes, to have the formation of the European Union. Now, the attitude in Germany has changed. Germany doesn't want to be the deep pocket for the rest of Europe. And if the political will isn't there then the euro is in danger of collapsing and if the euro collapses the European Union will also be greatly weakened.
QUEST: Soros on the euro and Greece. Interestingly, he was talking about George (sic) Maynard Keynes, Keynes-we were actually sitting, that interview, and why we choose that room, that was the apartments at Cambridge that were used by Keynes, when he was there. So, it was an historic, the osmosis of philosophy of economic theory-sounds good-was right away with us.
Zain Verjee is now with us at the CNN News Desk. Good evening.
QUEST: The market in New York is open, 11,000 is what we have been looking to see.
(DESK BELL CHIMES)
And we're getting closer, up 40 odd points. But it is still a good 34 or so, 32, points off from 11,000. I'm not going to say that we're not going to make it tonight. Not hanging my shirt on that particular one. We'll be back with more in just a moment. QUEST MEANS BUSINESS, at the end of the week.
QUEST: Welcome back.
I gave you a glimpse of the market in New York. The Dow is up 30 or 40 points. We now have got two of our correspondents in New York, Felicia Taylor is joining us from the New York Stock Exchange. Maggie Lake joins us from CNN, New York.
Maggie, we'll be with you in just-hold yourself for one second. Unless the mood urges you to jump in with a comment or two. Just wave a flag or something.
Felicia, now look, 11,000. It is still not there.
FELICIA TAYLOR, CNN FINANCIAL CORRESPONDENT: Yes.
QUEST: You know, and we've got earnings next week.
TAYLOR: We do, indeed. OK, so what we are basically calling this is like a tortoise rally; the slow approach to 11,000. We are now up, about what? 36 points, 38 points right now. Traders anticipating a fairly good round of first quarter earnings reports next week. That begins on Monday. Today, shares of oil giant Chevron, they are up about, what have we got now? Up 2.33 percent, that is because the company says the profits will be better than last quarter. That is giving a little bit of momentum to this market and like I said on Monday, you can't fight the tape. A surge in February wholesale inventories, is another positive economic sign. That shows that businesses are willing to restock their shelves in order to meet demand.
TAYLOR: So it continues to be a story of-like positive/negatives for the market. And as one trader put it to me, the patient is off life support, but it is still in intensive care, the market doesn't have any real conviction yet.
QUEST: So, in that scenario, this earning season, Q1,and we'll be doing our Q25, which hopefully you will help us with our red and green balloons. And is this earning season coming up a significant one?
TAYLOR: Yes, absolutely and already today it is proving to be very interesting. We're expecting a good earning report from a number of companies and it is going to give us a wide overview of a lot of American industries. However, ALCOA, that is going to get us started on Monday. Today the aluminum company, as you say, al-u-mini-um, was downgraded by two different banks. JP Morgan bringing down to a neutral and taking it off its focused list. Those shares right now are off, I've got to tell you, they are off 4 percent. The company, itself, the stock, has been down 11 percent since the beginning of the year.
As you know, we had retail sales out here in the U.S., they were much better than expected. Next week we are going to hear from Alvia Mate (ph), that is the company that runs Luis Vitton, we'll find out if foreign retail sales are fairing just as well.
And then YUM Brands, that is the company that owns Kentucky Fried Chicken, Taco Bell. Good numbers from them. That gives a read about the restaurant business, if people are comfortable eating out once again. Of course, we have technology, Intel and Google, those are two companies that are widely watched, obviously. On the deck for financials, we have JP Morgan, Bank of America, and then finally on Friday, the big daddy of them all, GE has its earnings set up to report. It isn't really considered the bellwether it use to be, because its financial arm got hit so badly. But then again it still has over 200 subsidiaries, a good snapshot of the American economy.
QUEST: Only you, Felicia, on a Friday, could put Alvia Mate, Louis Vitton, and Kentucky Fried Chicken in the same.
QUEST: Just make sure you don't get walloped, don't go get your Kentucky Fried Chicken on your Luis Vitton.
TAYLOR: Covered it all!
QUEST: All right. Many thanks, Felicia Taylor, take her away.
We're going to talk more about three days of congressional testimony that has been taking place of the financial meltdown. They are wrapping up in Washington. Lawmakers have heard testimony from an A-List of financial players. Some might arguably say A-list, now coming down toward Zed-list, with their reputations. Alan Greenspan, head of the Fed for 18 years, Robert Ruben, Charles Prince, two of the top at Citigroup, during the boom years. On Friday, they focused on Fannie Mae, the GSA, the GSE, government sponsored entity, that remains to this day, a major fault line in the U.S. financial system.
Maggie Lake, in New York, now.
Fannie Mae was one of those organizations that we all thought we would ever have to learn that much about. It started with a B, ended with an O ring, and most people had to snore when they heard the name.
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: That's right, unfortunately, though Richard, there are absolutely critical, especially now the reason we have to talk about them, Fannie Mae, Freddie Mac, along with the federal housing authority, underwrite nine out of 10 mortgages in the U.S. It is absolutely the entire market. And they are this sort of odd entity. There are private companies, with this implicit backing by the government. A lot of people think that they are one of the main reasons, when problems, that sort of spark this financial crisis that we had.
Today, the former CEO, Daniel Mudd testified and very much the same of what we heard all week. Mistakes were made, he was very sorry about them, but ultimately he said Fannie and Freddie were not responsible for starting the financial, rather they were sort of a victim of it.
What he did say, though, and very clearly, was that it is-he sort of laid out the dilemma facing officials, as they try to figure out what do with these things in the future. Have a listen.
(BEGIN VIDEO CLIP)
DANIEL MUDD, FMR. CEO, FANNIE MAE: Government entities created to support homeownership as a social good will tend to socialize the risk to all taxpayers. Purely private companies will exercise their fiduciary responsibility to pass the costs and the risks to homeowners. Hybrid organizations such as a GSE, will be left to balance conflicts between taxpayers and homeowners and shareholders. There are no simple answers.
(END VIDEO CLIP)
LAKE: Well, that is not very inspiring is it? It is a real conundrum. Republicans or conservatives are the ones who are really pushing for the privatization but Mudd said he does not think it is able-or possible-to take these things private in this lifetime. So, it is still a very, very big problem here in the U.S.
QUEST: All right. Maggie Lake, we have to leave it there. Thank you for watching those hearings. I'm sure you've heard more of the mea culpas than ex culpa than you ever wished to.
Have a great weekend. Many thanks, Maggie Lake.
Now, this week we heard Alan Greenspan say that he was right 70 percent of the time, wrong 30 percent. We have heard Chuck Prince and Bob Rubin of Citi say that mistakes were made, but they didn't get down to the granularity of the balance sheet. It has drenched up the recurring question: Why didn't these people see the crisis coming? Alan Greenspan, the former Fed chairman, denied accusations he failed to foresee the sub- prime bubble. George Soros has a different view.
(BEGIN VIDEO CLIP)
SOROS: Greenspan argues that if markets can't foresee a bubble, how can the regulators? Well, he is wrong. Because markets, when I foresee a bubble, and I foresee more bubbles than there are, you know? I recognize seven of the three bubbles. But when I see a bubble I join it, because that is how I make money. Therefore, regulators can't count on market participants to prevent bubbles from developing. And if bubbles are harmful, then it is the job of the regulators to try to dampen it. Greenspan explicitly refused to regulate asset bubbles, on that basis. And he was wrong, because asset bubbles do need to be regulated. And regulators have to accept the fact that they won't be able to foresee everything.
QUEST: Well, what about those at the head of the banks that say that they couldn't have know what was going on that far down. It begs the question-
SOROS: They could have known. And this is nonsense, because Paul Volcker knew it. I knew it. We made a mistake of thinking that it can't go as far as it did. And it went much further than we expected.
QUEST: During the crisis, in the run-up to it, and the years leading up to it, you were one of those that spotted the way the wind was blowing. And you did take, or you through others, financial advantage of what you saw taking place, didn't you? And in doing so, made a sizable amount of money, I believe, that is correct is it not?
SOROS: Right, in 2008, I merely preserved the capital that I-that we had made. It came out of retirement and took action because my money was being managed by others, and so I-I took, sort of hedged that position, and got I think we made 8 percent. So, it was a decent return. But the main thing was that I preserve my capital.
QUEST: Billions of dollars worth of capital preserved by George Soros. And tonight, he has given us-
(DESK BELL CHIMES)
QUEST: -what I think is the quote of the week, for me, at least, "when I see a bubble, I join it."
There is hope for the economy on the high seas. In just a moment, the head of one of the world's biggest shipping companies, and why the industry may finally be changing course. This is QUEST MEANS BUSINESS on CNN.
QUEST: China could report its first trade deficit in six years, this weekend. Analysts believe the country, which overtook Germany, as the world's biggest exporter, has seen a surge of imports over the past month. Economists say the value of raw material shipments, and purchases of consumer goods, has risen sharply. Now, China watchers think Beijing is preparing to let their one currency strengthen against the U.S. dollar. Possibly by widen the bounds by which it can trade. A monthly trade deficit could weaken the U.S. argument that the yuan is artificially being kept low.
One of the world's biggest shipping companies says international trade across Asia has dramatically improved. Tim Smith, regional head of the Danish freight company spoke to our Asia Business Editor Eunice Yoon, in Hong Kong, on the current state of shipping.
TIM SMITH, MAERSK NORTH ASIA: Since the low point, probably in the second quarter of last year, when hauling (ph) was really at the worst we've seen for a long time. Then gradually the situation has been improving and volume has been increasing month-by-month. And so I think we are starting to see that the situation is definitely on the upward.
But being very realistic about it I think we also see that probably a lot of this is restocking of inventories, where a number of our customers have got their inventory levels too low, and they now need to inflate their supply chains a little bit. So, we think that is perhaps more a reason for the upturn rather than any fundamental improvement in long-term demand.
EUNICE YOON, CNN ASIA BUSINESS EDITOR: So, then you don't think that this is the beginning of a real consumer comeback?
SMITH: We think it is definitely the beginning of an improvement. But we're expecting that probably the upturn will take longer and be slower than we have been used to in the past. In our industry we had a long time, maybe 30 years of 8 or 10 percent average growth rates every year. And we think that perhaps after this down turn we might have to get used to perhaps 4 or 5 percent growth rates as being more normal in future.
YOON: Well, during the recession a lot of ships were laid up. Do you think that we are going to see some of those ships going back at sea?
SMITH: It is already happening. I think the most recent figures, were down below 9 percent of the world's fleet is still laid up. So some of those ships are now coming back into service now. And that is absolutely necessary as world trade picks up. We need some of that capacity to be in service to carry the cargoes again.
YOON: Well, Asia hasn't been seeing (ph) the recovery. Have you seen any change in the pattern of trade because of it?
SMITH: Yes, I think, most definitely. I mean, we still think that consumer demand probably in Europe and North America may be slightly on the low side and perhaps it is the emerging markets that are going to be at the higher levels of growth going forward. Mainly because there still seems to be a high level of degree consumer debt and so on in Europe and America, which might inhibit their spending. We have also seen a little bit of a change in that inter-Asia trade seems to be particularly vibrant, and perhaps also import trade. And that is something that we are looking at.
China was mostly being renowned for exports in the last few years. But as it moves up the development ladder and economic growth continues. Consumers have got more money to spend and we are watching that very carefully now to see if that might be the start of a more sustaining increase of import flows.
YOON: So, you think this is going to be a more permanent change?
SMITH: We hope so, yes. I think the signs are promising so far. But we have to take things very carefully. I think the recovery is fragile. And it may not be a linear recovery. It may be a linear recovery. It maybe that it goes in little spurts and drops back a little bit. So, I think we need to be very agile and keep matching this supply and demand as carefully as we can to keep a stable environment.
QUEST: The head of Maersk in Asia on their trading position.
In a moment, George Soros, people in this country, in Britain, seem to think it is a hung parliament might be the worst of all outcomes in the current general election. Mr. Soros doesn't agree. You will hear his views in just a moment.
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN, with a cautionary tale to those who believe that social media Web sites can do no wrong. They may be the present and certainly the future, but some rules of decency and courtesy haven't changed one jot, as politicians in Britain just a few days into campaigning for the election are finding out.
The cut and thrust has claimed its first casualty. The Labor Party has sacked Stuart MacLennan as a candidate for a seat in Northern Scotland. Mr. MacLennan posted offensive comments on Twitter. Now, he referred to the elderly as "coffin dodgers," joked about slavery and at one point Tweeted, "My gosh, I've got a proper chav sitting opposite me this evening," a chav being a wholly disrespectful phrase used in this country to describe somebody of perhaps less than desirable taste.
Well, you may be forgiven for thinking that these days, anything on the Internet is fair game. Not for Mr. MacLennan tonight. And certainly it's not the talking point in the election.
Along with, of course, the state of the public finances in the spotlight in Britain. All the U.K. parties claim they hold the key to keeping the recovery on track.
What started the stimulus measures that have propped up the economy?
Back to George Soros.
QUEST: When is the right time to pull back on stimulus?
GEORGE SOROS, CHAIRMAN, SOROS FUND MANAGEMENT: Britain is in a very difficult situation because its debt has significantly increased because it took over the debt of the pa -- of the failing banks. And, also, Britain is very dependent on the financial industry. So those serious adjustments are -- are needed.
So where is the limit of -- of how far debt should be increased?
What really matters, of course, is the ratio of debt to -- to output or to the GNP. And to limit the -- the budget deficit if it results in a fall in the GNP, is as -- not a very good policy.
So there's a lot of talk, but in fact, it would be a big mistake to -- to reduce the stimulus before the economy has adjusted itself.
QUEST: Of course, in saying that, you're aware that the parties do have different perspectives on that?
SOROS: Different rhetorics. I'm not sure how different the policies will be.
QUEST: Do you believe this election is damaging to U.K. PLC, to the country as a whole, the -- at the end of the day, the country -- the economy is going to tear itself apart over this sort of electioneering?
SOROS: No, I don't think so. But I'm -- I don't live here, so I don't -- I'm not immersed in this problem. But, you know, markets are very distributed about the possibility of a hung parliament. I don't find it so disastrous, actually if it is a coalition government. And because if you have one party with a majority, it will only still represent 45 percent of the population. If you have a coalition, it will at least represent 60 or more.
So it would be, actually, closer to representing the public opinion.
(END VIDEO TAPE)
QUEST: George Soros talking to me there.
When we come back in just a moment, we'll take you up to date with your weekend weather.
This is QUEST MEANS BUSINESS.
Good evening to you.
QUEST: It's weather forecast time now. And I always find this part of the program -- although it's lovely to know what everyone else is experiencing, around the world, particularly with serious weather, Guillermo, really, it all comes down to what's in it for me.
GUILLERMO ARDUINO, CNN METEOROLOGIST: I know it.
And you know what?
You -- you managed to have me thinking about you. When I see the satellite picture, it's looking fine. I thought Richard must be happy.
I'm going to tell you, it was a nice day. Tomorrow -- tonight it's going to be a little bit chilly, especially in the morning, compared to what you experienced today, because we're getting like to 18 degrees in London. But Saturday is going to be another brilliant day. So I'm very happy to report this for everybody.
Not everybody is going to be happy. For example, Vienna -- some rain showers. It's raining right now. But some clouds here and also some rain showers into the northern parts of Scotland and in the islands.
Elsewhere, especially in Northern Ireland, Ireland, everywhere, even France, the Lower Countries and fine. It's going to be fine. Come Sunday, we may see some white cloud that we see these days. But in essence, it's going to be very nice, bright, dry and comfortable -- and comfortable for everybody.
Some winds in the south. I mean this is the time of -- when I have to look into, OK, where -- where's the negative?
With some -- some high seas in (INAUDIBLE) here. If you go to, let's say, Guatatede (ph), anywhere there, the golf courses in the south, Calis (ph) with some winds; mild, sunny everywhere. Britain -- I mean nothing in the way of delays at airports. Look at Amsterdam. Nothing.
I see a line of rain coming here south of Stockholm and then going into Poland. And as we move to the east, especially, remember, we may see some thunder in Hungary on the weekend and in northern parts of Greece, north of Athens. Then Sicily. But that's all it is. Every -- everything is moving away from land. And it's clearing the skies. So it's looking fine.
When you see the -- the satellite picture as dirty, that is simply white clouds, nothing else. So Munich with the same; maybe Berlin with some rain showers; and here in Scandinavia, in Sweden, especially.
Temperature wise, doing fine. Madrid at 22. It's going to remain dry. London, 17. So it's going to be dry at night. Athens, 19 degrees. Pretty nice.
Now, if our viewers are going to India, the heat wave continues all across the subcontinent, even in northern parts of Sri Lanka. So there's no relief coming up for the north. Everything remains the same. The forecast is calling again for the heat.
Kuala Lumpur may see some thunder and some rain showers. And -- and then, when it comes to China, this low is developing. It's going to bring some rain south of Shanghai this weekend. Hong Kong may see some rain showers and the southern parts of Japan, as well.
But it's going to remain dry and mild, especially in Northeast China.
So, Richard, enjoy the weekend.
Many thanks, indeed, Guillermo, at the World Weather Center.
Finally from us tonight, coming soon at a fast food restaurant near you. It's a sandwich and one of the key ingredients is missing. In the world of fast food, this monster is on everyone's lips and now Jeanne Moos has been tasting it.
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Behold the bunless wonder.
(on camera): Ready?
UNIDENTIFIED MALE: Ready.
MOOS: Let's go.
(voice-over): Now you get a taste of it.
(on camera): Good?
UNIDENTIFIED MALE: Wow. It's good.
UNIDENTIFIED MALE: Let's just tell America it's good.
UNIDENTIFIED MALE: It's good. I don't miss the bun.
MOOS (voice-over): Ah, the missing bun. KFC's Double Down is the talk of the sandwich world -- a slab of chicken, special sauce, cheese, bacon, cheese, more sauce, chicken.
UNIDENTIFIED FEMALE: Whoa. Whoa.
UNIDENTIFIED FEMALE: There's no bread.
MOOS (on camera): There's no bread. It's a sandwich without the bread. That's the whole...
UNIDENTIFIED FEMALE: Wow!
UNIDENTIFIED FEMALE: It is slippery.
MOOS (voice-over): Even as it was being tested in a couple of markets...
UNIDENTIFIED MALE: A Double Down sandwich combo?
MOOS: -- it became legendary on the Web.
UNIDENTIFIED FEMALE: That is so disgusting.
MOOS: Dissected, even serenaded.
UNIDENTIFIED MALE: N-A-S-T-Y, you ain't got no alibi. You're nasty.
MOOS: The nastiest part is that it's a salt bomb -- 1,380 milligrams.
(on camera): I'm about halfway through my : Salt requirement right here, huh?
UNIDENTIFIED MALE: Sort of.
MOOS (voice-over): Tell that to the guy whose eyes widened with pleasure at the first bite.
(on camera): There's a lot of salt and stuff there.
UNIDENTIFIED MALE: Hey, even better.
MOOS: What kind of diet are you on?
UNIDENTIFIED MALE: The kind you don't want to eat that every day. I eat lunch, I've got to take a picture of it and send to it my girlfriend.
MOOS (voice-over): Imagine sending her this, though it is only 540 calories -- similar to a Big Mac, but with more salt than fat, 32 grams. And it comes in a 460 calorie grilled version.
UNIDENTIFIED FEMALE: I'll give you a dollar for one.
MOOS: It will cost $5 when KFC starts selling them Monday.
UNIDENTIFIED FEMALE: Oh my god.
UNIDENTIFIED FEMALE: Try it.
UNIDENTIFIED FEMALE: Let me try it.
MOOS: Almost everyone who tried it liked it.
UNIDENTIFIED MALE: That's pretty righteous right there. That's awesome.
UNIDENTIFIED FEMALE: Chicken overload.
MOOS (on camera): Chicken overload.
UNIDENTIFIED FEMALE: Um.
MOOS (voice-over): Will the Double Down challenge the very definition of...
UNIDENTIFIED MALE: Sandwich.
MOOS: Two or more slices of bread with a filling between them. Still, if you don't like carbs...
UNIDENTIFIED FEMALE: This is the best idea that I've ever seen, ever.
MOOS: On the Web, the Double Down is being imitated.
UNIDENTIFIED MALE: A piece of French toast in between two pancakes.
UNIDENTIFIED MALE: Two pieces of fish and some instant ramen.
UNIDENTIFIED MALE: This is two steaks with a fried egg on top of a bed of hash browns.
MOOS: As for the fate of the bun...
UNIDENTIFIED MALE: Who cares about the bun?
UNIDENTIFIED FEMALE: They bore me.
UNIDENTIFIED FEMALE: No bun, because bun, I mean bun, we don't want buns.
MOOS: Remember when it used to be the meat that was missing?
UNIDENTIFIED MALE: Where's the beef?
MOOS (on camera): Where's the bun?
(voice-over): But not even KFC can make all buns obsolete.
Jeanne Moos, CNN...
UNIDENTIFIED MALE: Hey, where's the beef?
MOOS (on camera): Where's the bun?
(voice-over): New York.
UNIDENTIFIED MALE: No bun.
(END VIDEO TAPE)
QUEST: That is before we go.
We've come to the end of a week. The Dow Jones still hasn't managed to get through 11000, just shy of it. What Felicia Taylor called "the tortoise rally."
Who knows what it will be next week?
That's QUEST MEANS BUSINESS for tonight.
thank you for your time and attention.
I'm Richard Quest in London.
Next week, part of the program will come from New York.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"MARKETPLACE MIDDLE EAST" is next.
I'll see you next week.